India: PELLEX falls INR 100/t amid muted trade, sluggish DRI market sentiments

• Bids remain lower than offers
  
  
• Offers from neighbouring regions lower than Raipur
  
  
• Export market subdued
  
  

BigMint's bi-weekly domestic pellet (Fe 63%) index fell by INR 100/t to INR 9,550/t DAP ($115/t) Raipur on 9 February 2024 compared to the last assessment on 6 February. No deal was recorded in this publishing window in the absence of active trade. Landed offers from Odisha were lower by INR 200-400/t than local Raipur offers, said a source.

Pellet prices in Raipur remained stable over the last two or three days. Despite the price cut by local plants at the start of the week, no booking was heard from buyers. In the neighbouring regions, prices dropped slightly recently but in a few regions prices are still INR 200-300/t higher for Raipur sponge iron makers against local offers.

A market participant said, "Many market players are adopting a cautious approach, opting to wait and watch rather than committing to purchases. The hesitation is compounded by liquidity concerns, especially with the financial year coming to an end. Additionally, pressure from the downtrend in the sponge and finished steel segments is influencing decisions regarding raw pellet purchases."

A pellet producer said, "We are getting inquiries but buyers' bids are lower up to INR 400/t against offers. The export market is also in a downtrend due to the CNY holidays."

A buyer from Raipur said: "In the past few days, steelmakers purchased material from the neighbouring regions which weighed on finished steel prices. Due to this reason purchasing raw pellets at current offers is not viable for us. We are expecting more price reduction from pellet producers."

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodologyClick here.
  
  
• No deal has been reported so far this week, and not been taken into account for price calculation and accorded 0% weightage for T1 trade.
  
  
• Fifteen (15) firm offers, bids, and indicative prices were heard. Eleven (11) were taken for price calculation and given the balance 100% weightage.
  
  

Market highlights

• Raipur pellet offers stable: Godawari Power and Ispat Ltd (GPIL) kept pellet (Fe 63% +/-0.5) offers stable at INR 9,800/t ($118/t) exw-Raipur on 9 February. Offers of other major pellet players in the region remained stable at INR 9,400-9,500/t ($113-114/t) exw.
  
  
• P-DRI prices in Raipur fall d-o-d: BigMint's P-DRI (FeM 80%) prices fell by INR 150/t d-o-d to INR 26,300/t exw on 9 February. However, the assessment for the sponge in Raipur increased by INR 100/t w-o-w today. Sponge iron prices in India witnessed a substantial drop, decreasing by INR 50-400/t in almost all major markets. This decline could be attributed to negative market sentiments due to drop in semi-finished steel prices.
  
  
• Billet prices in Raipur down d-o-d: Billet prices in Raipur dipped by INR 100/t d-o-d to INR 39,250/t exw on 9 February. However, prices remained stable w-o-w. The index dropped amid transactions recorded at lower prices and buyers were cautious, engaging only in need-based procurement.
  
  

Outlook

The pellet market in Raipur is expected to remain volatile in the coming days amid sluggish sentiments. A few buyers are expecting price cuts in the coming days.